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19 October 2006

LEGAL OPINIONS:

SAMPLE OPINION LETTER NO. 4A: REAL ESTATE (Fee Simple Title)

The Solicitors' Legal Opinions Committee was constituted for the purpose of reviewing materials previously
published with respect to solicitors' opinions and preparing guides for the assistance of the
profession.

The members of our Committee at this time are:

Sandra D. Sutherland, Q.C. (Chair)

Paul D. Bradley of Lawson Lundell LLP
Byran Gibson of McCarthy Tetrault LLP
Mitchell H. Gropper, Q.C. of Farris Vaughan Wills & Murphy LLP
Donald J. Haslam of Kornfeld Mackoff Silber LLP
Jacqueline Kelly of Davis & Company LLP
Greg Lewis of Bull, Housser & Tupper LLP
John O.E. Lundell, Q.C. of Stikeman Elliott LLP
Mitchell McCormick of Fasken Martineau DuMoulin LLP
Iain Mant of Fasken Martineau DuMoulin LLP
John Morrison of Lang Michener LLP
Robert Shouldice of Borden Ladner Gervais LLP
Anne M. Stewart, Q.C. of Blake, Cassels & Graydon LLP
David A. Zacks, Q.C. of Blake, Cassels & Graydon LLP

In November 1999 the Committee created a real estate subcommittee of:

Nicolaas Blom of McCarthy Tetrault LLP

Paul D. Bradley of Lawson Lundell LLP
Donald J. Haslam of Kornfeld Mackoff Silber LLP

Nicolaas Blom was a member of the Committee and chaired the real estate subcommittee until the end of
2005, when he retired from practice. At that time Byran Gibson replaced him on the real estate
subcommittee and Paul Bradley replaced him as chair of the real estate subcommittee.

Earlier Statements

Our Committee has issued six earlier statements concerning legal opinions. Those statements are listed as
Items
1.1 to 1.6 inclusive on the list of reference materials (the “Reference Materials”) included at the end of this
statement. Attached Sample Opinion Letter 4A: Real Estate (Fee Simple Title) provides specific opinion
language and updates the Statement of the Committee Concerning Legal Opinions: Real Estate issued in
December 1993
OCTOBER 19, 2006
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and listed as Item 1.5 of the Reference Materials. Our Committee has reviewed the six earlier Statements
and,
apart from such necessary updating, confirms the principles set out therein.

Sample Opinion Letter No. 4A: Real Estate (Fee Simple Title)

The Committee has prepared the attached Sample Opinion Letter 4A: Real Estate (Fee Simple Titl e) as a
“third party legal opinion”, that is, an opinion to be given by a solicitor for one party in a commercial
transaction to the other party in the transaction. Sample Opinion Letter No. 4A relates to real property
registered in the land registration system established under the Land Title Act of British Columbia. The
Committee intends in the near future to prepare a sample opinion letter 4B to be used in transactions in
which real property registered in
British Columbia is held by a trustee.

The assumptions, qualifications, and limitations in Sample Opinion Letter No. 4A: Real Estate (Fee Simple
Title) are not a replacement for careful, knowledgeable, transaction-specific legal work (including inquiries)
which should be undertaken by the solicitor delivering such a real estate opinion. Sample Opinion Letter No.
4A merely sets down those basic matters that the members of our Committee consider they would address in
an opinion of this nature. Two principles must override all other considerations in this Sample Opinion Letter
No. 4A and in all similar opinions:

1) the opinion giver may not rely on information (whether contained in certificates or in other
documentation) or assumptions, otherwise appropriate in the circumstances, if the opinion giver knows
or has reason to believe that the information or assumptions are inaccurate or incomplete; and

2) the opinion giver may not rely on a general qualification or limitation (such as the “bankruptcy and
insolvency exception”) to the “remedies opinion” (the opinion that a document creates a legal, valid,
and binding obligation and is enforceable) if the opinion giver knows or has reason to believe that an
existing issue would limit the enforceability of a specific provision of the document or of the entire
document, and accordingly either the opinion giver must decline to give the remedies opinion or the
existing issue and its effect must be specifically addressed in the opinion.

Wilfred M. Estey has also set down some general rules concerning assumptions in commercial transactions
which are worth noting. They are contained at pages 81 to 83, inclusive, of his book Legal Opinions in
Commercial Transactions, 2nd edition, listed as Item 4 of the Reference Materials. Briefly, Mr. Estey
states that assumptions should be limited, so far as possible, to matters of fact, assumptions of facts should
not be made as to matters that it would normally be the duty of the giver of the opinion to inquire into, and
assumptions of fact that render a legal conclusion meaningless should be avoided in virtually all
circumstances. The last point is a reference to some fortunately rare requests to make particular
assumptions that go to the heart of the opinion requested in order to arrive at a particular legal conclusion.

Although it would appear to many that contemporary opinions are burdened with an ungainly number of
assumptions and qualifications, there are almost an equal number of unstated assumptions which apply to
opinions. Because solicitors are not normally able or expected to investigate impossibility or illegality which
may arise, not on the face of the instrument, but out of an undisclosed intended use of the instrument,
opinions are generally not qualified as to these kinds of vitiating elements unless the giver knows or has
reason to believe such a vitiating element exists. Our Committee has concluded that a similar unstated
assumption applies in respect of statutes of limitations. Although clearly such statutes limit the
enforceability of every instrument, to our knowledge, qualifications for such statutes are generally not
inserted into enforceability opinions.

OCTOBER 19, 2006

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Our Committee points out that the equitable principles limitation included in Sample Opinion Letter No. 4A:
Real Estate (Fee Simple Title) covers both the traditional discretion of a court of equity and the newly
emerging concepts of materiality, reasonableness, good faith and "fair dealing". Refer to pages 206 to 216 of
Wilfred M. Estey's book Legal Opinions in Commercial Transactions, 2nd edition, listed as Item 4 of
the Reference Materials. A doctrine of performance in good faith appears to be emerging from recent
Canadian decisions
(some unreported).

Sample Opinion Letter No. 4A: Real Estate (Fee Simple Title) is not intended for use as a multi-
jurisdictional opinion. It does not address conflicts issues, choice of law clauses, or jurisdictional questions.
If the facts of the transaction require that such matters be addressed, then assumptions, qualifications, and
limitations will be required in addition to those contained in Sample Opinion Letter 4A. Our Committee
refers the reader to Item
8 of the Reference Materials as a source for information on multi-jurisdictional
opinions.

The organization of a commercial opinion varies from firm to firm. Some firms append the qu alifications and
limitations as a separate schedule to the opinion. Some firms incorporate by reference terms defined in the
documents into the opinion letter. Sample Opinion Letter No. 4A: Real Estate (Fee Simple Title)
merely indicates one way of organizing the material, which our Committee considers is by no means the only
way.

Guidelines

In the October 1992 Statement, our Committee recommended adherence to Certain Guidelines for
Negotiation and Preparation of Third Party Legal Opinions (the "Guidelines"), listed as Item 9 of the
Reference Materials, which were published with the Silverado Accord, listed as Item 5 of the Reference
Materials. The Guidelines address many of the ethical issues that arise between lawyers when they are
negotiating and preparing opinions. The Guidelines can be read and applied quite separately from the
Silverado Accord. Our Committee continues to endorse the Guidelines for third party legal opinion practice in
British Columbia. With the permission of the American Bar Association, the full text of the Guidelines was
reproduced and attached to the October 1992
Statement of the Committee listed as Item 1.3 of the Reference
Materials.
 OCTOBER 19, 2006
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Reference Materials

1. Statements of the Solicitors’ Legal Opinions Committee:

1.1. Statement of the S o l icit o r s’ L egal Opi nio ns Co m mi tte e Co nc er ni ng L eg al

O pi nion s: S t and ar d Form Security Instruments, adopted 2 May 1989 and published in
the Benchers’ Bulletin, 1989: No. 10 November

1.2. S tat em e nt o f th e S o l icit o r s’ L egal O pi nion s Co mm i tte e Co nc er ni ng L

eg al Opinions: Personal
Property Security Act, adopted 4 July 1991 and published in the Benchers’ Bulletin, August
1991

1.3. S tat em e nt o f th e S o l icitor s’ L egal Op in ion s Co m mi tt ee Co nc er ning Legal

O pinions: The Silverado Accord Including Certain Guidelines, adopted August 1992 and
distributed by the Law Society of British Columbia in October 1992

1.4. S tat em e nt o f th e S o l icitor s’ L egal Op in ion s Co m mi tt ee Co nc er ni ng L eg al

O pi nio ns: PPS A S a mpl e
Opinions, with Sample Opinion Letters No. 1 and No. 2, adopted 4 March 1993

1.5. S tat em e nt o f th e S o l icitor s’ L egal Op in ion s Co m mi tt ee Co nc er ni ng L e

gal O pi ni o ns: Re al Est at e , December 1993

1.6. Statement of the Solicitors Legal Opinions Committee Concerning Sample Opinion No.
3: Commercial, with Sample Opinion Letter No. 3, adopted February 2002

2. Paper of the Subcommittee of the Commercial, Consumer & Corporate Law Section of the British
Co l umb ia Br anc h o f t he C a nad ia n B ar As so c i atio n: S o l icitor s’ Opi nio ns in Co m
mer c ial Tr an sac t ion s , 1977

3. Legal Opinions in Corporate Transactions, by A. Field and R. Ryan, Business Law Monographs Vol. C6,
Mathew Bender, New York, 1988

nd
4. Legal Opinions in Commercial Transactions, 2 edition, by Wilfred M. Estey, Butterworths, 1997

5. Third Party Legal Opinion Report, including the Legal Opinion Accord, of the Section of Business
 Law, American Bar Association, 1991 (the “Silverado Accord”)

6. Fitzgibbon and Glazer on Legal Opinions, by Scott Fitzgibbon and Donald Glazer, Aspen Publishers, last
supplemental dated 2/3/2006

7. Opinions Requested by Lenders: Not a Negotiable Instrument II, Sandra D. Sutherland, Q.C.,
Vancouver, B.C., Continuing Legal Education of British Columbia, November, 1989

8. Cross Border Issues in Secured Lending, David Zacks, Insight Conferences, “Commercial Loan
Transactions, Achieving Bullet-Proof Security”, May 30, 1996, Vancouver, (see also the paper of
Michael Disney and Ian McBride for Toronto Conference on the same subject, January, 1996)

OCTOBER 19, 2006

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9. Certain Guidelines for Negotiation and Preparation of Third Party Legal Opinions, The Committee on
Legal Opinions of the Section of Business Law, American Bar Association, 1991 (now replaced by
Guidelines for the Preparation of Closing Opinions, The Committee on Legal Opinions of the
Section of Business Law, American Bar Association, February 2002 57 The Business Lawyer 875,
which Guidelines can also be found at:

http://www.abanet.org/buslaw/tribar/materials/20050120000001.pdf )
OCTOBER 19, 2006
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SAMPLE OPINION LETTER NO.

4A: REAL ESTATE (Fee Simple
Title) (British Columbia Transaction)
(to be given by lawyer for one party to the otherparty and,
if appropriate, the lawyer forthe other party)

(limited to an opinion on land registered in the registration system

established under the Land Title Act)

Endnote 1 [DATE]

[ADDRESSEE]

Dear < >

Re:

Describe: [i] limited or special role, if appropriate; [ii] the Client(s); [iii] the transaction; [iv] the principal agreement.

.
We have acted as [i] counsel to [ii] [X Co] (the “Corporation”) in connection with [iii] [describe
transaction; eg. purchase of land etc.] pursuant to [iv] [describe principal agreement; eg. purchase
and sale agreement, loan agreement etc.] (the “Principal Agreement”) between the Corporation and
[insert applicable party or parties (the
“Mortgagee”)].

If the Principal Agreement does not contain a precise legal description of the lands to which this opinion relates, and a defined
term identifying those lands, insert PID number and legal description, including city/municipality and define lands to which
opinion relates. If the Lands are a strata lot add “together with an interest in common property in proportion to the unit
entitlement as shown on Form V”.

The description of the Lands is complete without reference to easements and restrictive covenants which may be
appurtenant to it.
Terms used in this opinion letter and defined in the Principal Agreement but not in this opinion letter
have the meanings given to them in the Principal Agreement.
OCTOBER 19, 2006
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The opinion should not be based on any document or certificate which the opinion giver knows or has reason to believe is
inaccurate or incomplete. If any document or certificate is not current, add an appropriate assumption, as in 2.3 or 2.4.

Endnote 2

List documents and certificates which were reviewed, stating whether they were originals, copies or certified copies. If the
latter, consider whether the person certifying is appropriate to do so.

For 1.2, consider whether additional assumptions or qualifications are appropriate where you are acting for the Mortgagee and
Mortgagee requires that its “standard” Express Mortgage Terms be used without review or alteration.
1. EXAMINATIONS

In connection with this opinion letter, we have examined the following; [copies of which are
enclosed or have been previously delivered to < > ]:

1.1 the Principal Agreement;

1.2 the Form B mortgage (including the Mortgage Terms – Part

2 (the “Mortgage Terms”) [attached thereto/fled under No.
 and incorporated therein by reference]) in the principal amount of $ made by the
Corporation in favour of the Mortgagee dated  (the “Mortgage”);

1.3 [Identify any other transaction documents e.g. purchase agreement, Form A Transfer];

(collectively , with the Principal Agreement and the

Mortgage, the “Documents”);
rd
Certificate under 1.4 - Facts only. e.g. confirmation that there is no leasehold interest of 3 parties for term not exceeding
3 years under which there is actual occupation; that Corporation (if registered owner) is not acting as trustee and has not
disposed of its interest in the Lands by an unregistered document. SEE SUGGESTED FORM OF OFFICER’S
CERTIFICATE ATTACHED AS APPENDIX I

Certificate(s) under 1.5 – include Certificate of incorporating jurisdiction if Corporation is extra-provincial corporation.
1.4 a certificate dated < > of [an oficer] of the Corporation;

1.5 a copy of Certificate of [Good Standing] [Compliance] with respect to the Corporation issued
on < > by [the Registrar of Companies] [Industry Canada];

If applicable, list additional documents in connection with the transaction which were reviewed.
1.6 [other].

We have also examined such other corporate records and

documents and certificates of public oficials, made such
investigations and searches and considered such questions of
law as we have considered necessary to give the opinions
expressed in this letter. The opinions
expressed herein are based on our search(es) of the records of
the
[applicable] Land Title Ofice (the “LTO”) made at
AM/PM on
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 -8-

the day of , 20_ .

2. ASSUMPTIONS

No assumption should be made with regard to a fact which the opinion giver knows or has reason to believe is inaccurate or
incomplete.

It may not be appropriate to assume the identity of corporate officers if the opinion is being given in respect of the opinion
giver’s own corporate client.

Endnote 3
For the purposes of the opinions expressed in this letter we have assumed:

2.1 the genuineness of all signatures, the authenticity of all documents submitted to us as
originals, the conformity with authentic originals of all documents submitted to us as copies,
the identity and personal legal capacity of all individuals acting or purporting to act as
corporate oficers, and the identity and capacity of all individuals acting or
purporting to act as public oficials;

2.2 the accuracy and completeness of all information

provided to
us by ofices of public record;

Include second part if certificate not dated the date of the opinion.
2.3 that the facts set out in the certificate described in section
1.4 are true and correct [and that there has been no change in those facts set out in such
certificate since the date of such certificate;]

2.4 that the Certificate(s) of [Good Standing] [Compliance] [Status] for the Corporation
remains valid as of the date of
this opinion;

2.5 that each of the Documents creates legal, valid and

binding obligations of, and is enforceable in
accordance with its terms against, each of the parties
thereto other than the
Corporation
;
OCTOBER 19, 2006
 -9-

Use only where Mortgage secures blended payment of principal and interest.
2.6 that the [yearly/half-yearly] rate of interest disclosed in the
Mortgage for the purposes of Section 6 of the Interest Act
(Canada) is accurate.

3. OPINION

Based and relying upon, and subject to, the foregoing and
subject to the qualifications and limitations set out below, we
are of the opinion
that:

The language in 3.1 is either the same language used in the relevant Certificate or reflects legal conclusions which can be
drawn from the language in the relevant Certificate. It is possible that the language used in one or both Certificates will
change over time, so the Certificate should be reviewed to ensure the language is still appropriate. Variations of the 3.1
opinion can be used so long as the language either
is the same as the language in the Certificate or reflects legal conclusions which can be drawn from such language.
3.1 the Corporation exists as a company under the Business Corporations Act (British Columbia)
and is, with respect to the fling of annual reports, in good standing with the Ofice of the
Registrar of Companies for the Province of British Columbia;

or

3.1 the Corporation exists as a corporation under the Canada Business Corporations Act. has sent
to the Director under said Act all required annual returns, has paid all fees required under the
Act, is registered as an extraprovincial company under the Business Corporations Act (British
Columbia) and is, with respect to the fling of annual reports, in good standing with the Ofice
of the Registrar of Companies for the Province of British Columbia;

3.2 the Corporation has the corporate power and capacity

to own its interest in the Lands and to enter into and
perform its obligations under each of the Documents to
which it is a
party;

3.3 the execution and delivery by the Corporation of each

of the
Documents to which it is a party, and the
performance by the Corporation of its obligations
thereunder, have been
OCTOBER 19, 2006
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duly authorized by the Corporation;

3.4 each of the Documents to which the Corporation is a

party
has been duly executed and delivered by the
Corporation;

3.5 each of the Documents to which the Corporation is

a party creates legal, valid and binding obligations of
the Corporation and is enforceable against the
Corporation in
accordance with its terms;

3.6 the execution and delivery of the Documents to which

it is a party by the Corporation and the performance by
the Corporation of its obligations thereunder do not
conflict with or result in a breach of any provisions of
the constating documents of the Corporation (If
appropriate, refer to
unanimous shareholders agreement etc.);

Add if applicable

For compliance with laws see Endnote 4.

3.7 the execution and delivery of the Documents to which it is a party by the Corporation and
the performance by the Corporation of its obligations thereunder do not violate, conflict with,
or result in a breach of any laws of British Columbia or the laws of Canada applicable in
British
Columbia;

Obtain and rely on a certificate as to assets and business.

Endnotes 5, 6 and 7

The use of only the word “registered” limits the scope of the opinion. If “registered” is omitted or “beneficial” is used it is
necessary to ensure there is no
unregistered trust or transfer, which could
3.8 no consent, approval, authorization, exemption, fling, order or qualifcation of or with any
governmental authority is required under the laws of British Columbia or the laws of Canada
applicable in British Columbia for the execution, and delivery by the Corporation of the
Documents to which it is a party or the performance by the Corporation of its obligations
therein;
3.9 the Corporation is the registered owner of the Lands in fee simple subject only to:

(a) the exceptions and reservations stated in subsections

23(2)(a), (b), (c), (e), (f), (h), and (i) and 108(2) of the

OCTOBER 19, 2006

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be done by way of officer’s certificate.

In (a) add reference to 23(2)(d) if officer’s certificate does not address unregistered leases for terms of 3 years or less or
confirms existence of such leases.

Endnote 8

Legal notations which refer to benefits which are appurtenant to the Lands, such as easements, restrictive covenants over
other lands etc, should be described separately as shown below.

No comment is made as to the proper form of opinion where the title to the Lands or minerals is an absolute title. See section
174 of the LTA.
Land Title Act (British Columbia),

(b) the exceptions expressed in sections 50 and 55 to 58 of the

Land Act (British Columbia),

(c) where any of the Lands is or becomes a strata lot, any lien registered by the strata corporation pursuant to
Section
116(1)(a), (b) or (c) of the Strata Property Act (British
Columbia),

(d) the equitable discretion of the Court to order rectification of any instrument relating to an interest in land,

(e) [list (or add as schedule) all legal notations ranking in priority to the Mortgage which are in the nature of
restrictions or charges, registered charges, registered liens and registered interests or use a term like
“Permitted Prior Encumbrances” if appropriately defined in the Principal Agreement];[ if there is a restrictive
condition, right of reverter, or obligation imposed on the Lands by the Forest Act (British Columbia) which is
endorsed on title specify the nature of the endorsed right (see
23(j) LTA) ],

(f) the Mortgage, and

(g) [list (or add as schedule) all legal notations ranking subsequent to the Mortgage which are in the nature of
restrictions or charges, registered charges, registered liens and registered interests or use a term like
“Permitted Subsequent Encumbrances” if appropriately defined in the Principal Agreement].

[If applicable add; The following interests are registered as being appurtenant to the Lands:
(a) an easement registered under No. ----- against [describe servient tenement]; (b) a
restrictive covenant …..etc..]

3.10 the Mortgage was registered in the LTO on  under No.  and constitutes a fxed and
specific mortgage and charge on the Lands, subject only to the matters specified in clauses
(a) to (e) inclusive of section 3.9 hereof.
OCTOBER 19, 2006
 - 12 -

This opinion would not usually be given to an experienced BC Mortgagee, but may be appropriate where the Mortgagee is
unsophisticated or otherwise unfamiliar with the BC Land Title Office. When giving this opinion, ensure that the Mortgage
contains no other charges (e.g. grant of security interest) which might require registration.
3.11 [the registration of the Mortgage in the LTO is the only registration or filing of or with
respect to the Mortgage or the mortgage and charge thereof in any office of public record
in the Province of British Columbia which is necessary or desirable to preserve or protect
the mortgage and charge of the Mortgage or the priority thereof].

4. QUALIFICATIONS AND LIMITATIONS:

No qualification should be included with regard to a fact which the opinion giver knows, or has reason to believe is inaccurate
or incomplete.

Known bankruptcy, insolvency and similar issues must be specifically addressed.

4.1 Enforceability of the Documents is subject to:

(a) applicable bankruptcy, insolvency, receivership, fraudulent preference, fraudulent

conveyance, reorganization, moratorium, arrangement, winding up and other similar
laws generally affecting the enforcement of the rights of creditors or others;

Endnote 9

Endnote 10 and 11
(b) general principles of equity (whether or not enforcement is considered in a proceeding in
equity or at law), including the discretion exercisable by the court with respect to equitable
remedies such as specific performance and injunction and the concepts of materiality,
reasonableness, good faith and fair dealing in the performance and enforcement of a contract
required of the party seeking its
enforcement;

(c) the discretion exercisable by the court with respect to stays of enforcement proceedings and
execution of judgments;

(d) the efect of a vitiating factor such as mistake, misrepresentation by a person other
than the Corporation, fraud, duress or undue influence;

(e) each Document will be enforced by the court only to the extent that the court determines
that any provision which is unenforceable or invalid can be severed without impairing the
interpretation and application of the remainder of that Document;

(f) the rate of post judgment interest applicable to any amount owing under any of the
Documents will be the rate specified pursuant to the Court Order Interest Act (British
Columbia), subject to variation on application to the court as provided for in such

OCTOBER 19, 2006

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Act;

(g) the discretion exercisable by the court to

enjoin the enforcement of any right of private
sale provided for
in the Mortgage and to require that the Lands be
sold pursuant to a court supervised foreclosure
proceeding;
and

(h) the possible unenforceability of the provisions

of Section  of the Mortgage which provide that
any receiver appointed thereunder is the agent
of the Corporation rather than the agent of the
Mortgagee.

4.2 Agreements or arrangements to pay interest at a

criminal
rate (the terms “interest” and “criminal rate” having
meanings specified in Section 347 of the Criminal Code
(Canada)) are not enforceable.

See Interest Act (Canada) Section 8 4.3 Any provision in the Documents requiring the payment
of
interest at a higher rate after rather than before default
may be unenforceable.

4.4 We express no opinion as to the enforceability of

provisions
of the Documents which require the Corporation to pay
any
amounts to the Mortgagee in respect of fnes, penalties,
legal
fees or costs levied against, imposed upon or incurred
by the
Mortgagee, exceeding those awarded to or recoverable
by the
Mortgagee pursuant to applicable law or the order of a
court.
4.5 Section  of the [describe document] may be
unenforceable if
a court decides that the amount required to be paid
pursuant thereto constitutes a penalty and not a
reasonable
pre-estimate of damages.

4.6 Notwithstanding the provisions of the Documents as to

the
conclusiveness of a fact or the determination of a
matter a
court may permit the Corporation to introduce evidence
in
proceedings for the purpose of proving that the
conclusiveness of a fact or the determination of a
matter is
contrary to the evidence.
OCTOBER 19, 2006
 - 14 -

4.7 The enforcement of the Documents is subject to the

discretion of a court to impose restrictions on the rights
of creditors to enforce immediate payment of amounts
stated to
be payable on
demand.

4.8 We express no opinion as to the priority of the

Mortgage with respect to advances made after the
[initial] advance made on [date]. The Mortgagee
should search title to the Lands immediately prior to
each advance under or secured
by the
Mortgage.

Include where amounts are payable in foreign currencies

4.9 Any court action to recover any amount payable in a foreign currency will require conversion
of such amount into Canadian dollars at a rate of exchange which may not be the rate in
efect on the date of payment or the rate prescribed
in the Documents.

4.10 We have made no independent investigations of the

facts
referred to in the certificate described in section 1.4
hereof.

4.11 We express no opinion on any interest in or

registered in respect of the Lands that may be held
or claimed by or for any aboriginal people in their
capacity as an aboriginal
people
.

4.12 The opinions expressed herein are restricted to the

laws of
British Columbia and the laws of Canada applicable in
British Columbia on the date hereof.
 OCTOBER 19, 2006
- 15 -

Endnote 12

Endnote 13
4.13 We have, pursuant to your instructions, used the Mortgage Terms without review or
amendment. Accordingly, we express no opinion as to any limitations on the enforceability of
the Mortgage arising from such Mortgage Terms.

4.14 In the event of expropriation of any of the Lands pursuant to the Expropriation Act (British
Columbia), payment of the Mortgage will be determined in accordance with the provisions of
such Act and the General Regulation
thereunder.

Endnote 14

Amendment to this paragraph to permit disclosure to and/or reliance by certain types of third parties may be appropriate
where it is contemplated that, for example, the Documents may be assigned, syndicated or securitized. The opinion giver
should ensure, where extended reliance is permitted, that reliance will be effective as of the date of the opinion (see
qualification
4.12 above).
[Add specific qualifications arising from the documents and the nature of the transaction, if any]
This letter is solely for your use and benefit in connection with the
transaction described in the frst paragraph of this letter and may not be disclosed to or relied upon
by anyone other than you or used for any other purpose.
OCTOBER 19, 2006
 - 16 -

APPENDIX I (Page
1)

[Beneficial Owner/Owner]

OFFICER’S
CERTIFICATE

TO: [ADDRESSEES OF OPINION]

RE: [Describe and define the

Lands]

The undersigned hereby certifies, without incurring personal liability, on behalf of [name of
corporation] (the
“Corporation”) that I am the [insert title] of the Corporation and that:

1. The Corporation is the owner of the entire fee simple interest in the Lands.

2. No person has a leasehold interest in the Lands for a term of 3 years or less under
which there is actual occupation [except as set out in Schedule A hereto].

3. The Corporation has not disposed of the whole or any part of its interest in the Lands to
anyone by an
unregistered document [except as set out in Schedule “A” hereto].

IN WITNESS WHEREOF, the undersigned has executed this Certificate on [insert date].

[Name]
[Title]
OCTOBER 19, 2006
 - 17 -

ENDNOTES:

1. While the Sample Opinion has been drafted to be given by the lawyer for the
Corporation to the Mortgagee (and possibly to the Mortgagee’s lawyer), it has been
prepared in this way primarily for illustrative purposes and the Sample Opinion can be
adapted to reflect different circumstances (e.g. an opinion given by the Mortgagee’s
lawyer to the Mortgagee). The structure of the Sample Opinion should not be taken as
a statement by the Committee that it will always be appropriate for the lawyer for the
Corporation to provide such an opinion The Committee has previously expressed its
view that the usual practice in the Province of British Columbia is that lawyers for
borrowers do not, in most circumstances, provide enforceability opinions on “standard
form” security documents.

If the addressee is a B.C. lawyer, the addressee should consider the extent at law to
which he or she will be entitled to rely on such opinion, except as to matters within
the particular knowledge of the opinion giver (such as incorporation, existence and
corporate capacity and power of the Corporation and the due authorization,
execution and delivery of specified documents by the Corporation).

2. It is important that consideration be given to all applicable corporate records, all

documents necessary in connection with the transaction, all places of public record
where there may be relevant documents (which will require knowledge of the nature
of the business of the Corporation), all relevant searches and usually all applicable
statutes.

Practice varies as to the detail of documents and searches listed. The opinion giver
must ensure that copies of all documents examined or relied on by the opinion giver
are delivered to the other side.

3. Irrespective of assumptions in the opinion as to identity of individuals, the opinion

giver should be aware of, and take steps to counter, the risks of fraud which can arise
from impersonation or identity theft. This could involve obtaining and keeping
photocopies of picture identifcation of relevant individuals as well as complying with
any requirements imposed by the Mortgagee (where the solicitor for the Mortgagee is
the opinion giver) regarding the confirmation of identities of individuals.

4. An opinion that the Corporation has complied with ALL laws relating to its business
should not generally be given, even if limited or qualifed.

5. If the Corporation acquired the Lands prior to the date of the Certificate referred to in
clause
1.5 of the opinion, it is important for the opinion giver to determine whether or not the
Corporation has ever been struck off or dissolved. If this has happened the opinion
giver must determine that the Corporation has been restored. If a British Columbia
company was restored prior to the Business Corporations Act coming into efect the
opinion giver needs to ensure that the appropriate language (e.g. “the company shall
be deemed to have been continued in
existence as if its name had never been struck of“ - see Natural Nectar Products
Canada Ltd. v. Theodor (1990) 46 BCLR (2d) 394 (BCCA)) was in the restoration order
and, as the opinion
addresses title to real property, that no real property escheated to the Crown. For a
British Columbia company restored after the coming into efect of the Business
Corporations Act, as the opinion addresses title to real property, the opinion giver must
ensure that there has been
compliance with the requirements of the Escheat Act.

6. An opinion is sometimes requested that the owner of real property “has good, safe-
holding and marketable title” to such property; such a request will most often come
from an out of province opinion recipient. It is not the usual practice of British
 Columbia lawyers to provide an opinion

OCTOBER 19, 2006

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in this form, as the wording of the opinion does not reflect the title provided by the
Torrens system under the Land Title Act. Providing such an opinion may require
consideration of matters which are not addressed in the Sample Opinion (such as
determining the existence of a bare trust or unregistered instrument, considering
whether possible contamination may affect the marketability of the land, identifying
ambiguities in documents registered against the land which could give rise to litigation,
etc.).

7. The opinion on title or the registration and priority of the Mortgage can not be given if
registration of the applicable Form A Transfer or Mortgage has not been completed. If
the application is pending at the time the opinion is given the opinion giver can state:
“Upon completion of the registration in the LTO of the Transfer [use defined term] the
Corporation will be the registered owner…Upon completion of the registration in the LTO
of the Mortgage…We know of no reason why such registration should not be completed
in the ordinary course of the LTO procedure.”

8. Courts have an equitable jurisdiction to rectify instruments. It must be established

that the written instrument does not reflect the true agreement of the parties and that
the parties shared a common intention up to the time of signature that the provision in
question stands as agreed rather than as reflected in the instrument. The standard of
proof is a stringent one. The B.C. Court of Appeal recognized the applicability of
rectification of instruments creating interests in land (but did not grant rectification) in
Hawkes Estates v. Silver Campsites Ltd. (1991), 79 D.L.R. (4th) 677, and granted
rectification of an easement (expanding the area of its application) in Banville v. White
100 B.C.L.R. (3rd) 88, a 2002 decision of the B.C. Court of Appeal. In Banville both
parties had acquired the properties in question subsequent to the granting and
registration of the easement and neither was a party to the easement.

9. Paragraph 4.1(b) (the equitable principles limitation) covers the traditional discretion
of a court of equity as well as newer concepts of materiality, reasonableness, good
faith and “fair dealing”. Field & Ryan Legal Opinions in Corporate Transactions (New
York, 1988) as quoted in Estey, Legal Opinions in Commercial Transactions (Toronto,
1997) p.210.

10. The Committee considers that giving an opinion as to the validity, legality and
binding efect and enforceability of a document does not impose any obligation to
enquire into vitiating elements. However, the opinion cannot be given if the opinion
giver knows or has reason to believe any of these elements are present.

11. In circumstances where the opinion giver is aware of fraud, illegality, bankruptcy or
similar elements in the transaction, the opinion giver should consider any potential
effect of those elements on the title opinion – e.g. where title is being acquired
pursuant to a transaction reviewable under the Bankruptcy and Insolvency Act
(Canada).

12. This qualifcation is likely to be appropriate only in circumstances where the

Mortgagee’s lawyer is providing an opinion to the Mortgagee or where the Corporation’s
lawyer is providing an opinion to the Mortgagee and the Mortgagee does not have its
own counsel. Mortgagees which are fnancial institutions will typically have standard
form Mortgage Terms which they will specify be used. It is a question of fact, which
would have to be reviewed in the particular circumstances of the transaction, as to
whether the instructions of the Mortgagee expressly or impliedly require that the
standard form Mortgage Terms be reviewed on an individual transaction (the Mortgagee
may have such Mortgage Terms reviewed and amended on an ongoing basis by its
general counsel). In circumstances where the Mortgage Terms are not to be reviewed,
this qualification is necessary to establish that the Mortgagee carries the risk of any
enforceability arising from deficiencies in its Mortgage Terms. A lawyer for the
Corporation
who is not reviewing the Mortgage Terms should, of course, also obtain appropriate
instructions
OCTOBER 19, 2006
 - 19 -

from the Corporation as to this course of action.

13. Sections 4 and 5 of the General Regulation under the Expropriation Act (British
Columbia) govern compensation to the holders of security interests (which will
include mortgages) in expropriated land. These provisions may prescribe terms
applicable to the payment of a deficiency which are inconsistent with the original
repayment terms and may be inconsistent with restrictions on or conditions to
prepayment. The provisions may also limit an action for any deficiency, but this has
apparently not been judicially determined.

14. This opinion has been prepared in respect of a transaction where the Mortgage is
granted to secure indebtedness owing by the Corporation to the Mortgagee in a
commercial transaction such as a loan or a sale of real property with a mortgage back.
Additional considerations, assumptions or qualifications may be necessary where the
mortgagor is an individual (e.g. to determine compliance with interest disclosure
requirements under applicable consumer protection or other legislation or in
connection with prepayment rights), where the relationship between the Corporation
and the Mortgagee or the nature of the amount secured by the Mortgage might impact
the priority of the mortgage (e.g. the provisions of section 5 of the Partnership Act
(British Columbia)) or where the Mortgage purports to secure certain types of
obligations other than or in addition to “normal” indebtedness (e.g. a profit
participation or an option to acquire the mortgaged property).

A “generic” qualifcation is often found in opinions for U.S. real estate fnancings in a
form such
as the following:

“Certain provisions of the Documents may be unenforceable, but such unenforceability

will not, subject to the other exceptions, qualifications and limitations in this opinion,
render any Document invalid as a whole or substantially interfere with realization of
the principal benefits provided by each Document.”

The use of this form of qualification is rare in British Columbia or elsewhere in Canada.
While an argument can be made that it is appropriate where there are a number of
minor enforceability issues which cannot be dealt with by amending the document (e.g.
the document is a “standard form” document, the document has been executed prior
to review by the opinion giver, etc.), the Committee is of the view that the usual and
better practice is to identify specific enforceability issues by way of individual
qualifcations.

OCTOBER 19, 2006